Accepted Answer

You have to have beaten the boss in the Green Ruins... the Giant Chicken and then the tree should have gotten somewhat bigger and should have a hole in the trunk.... put a tree rune stone in the whole and the next morning it will have grown enough to let you in

Other Answers

I had to water the tree for a couple of days before the hole appeared. Once it did you just approach the tree with the tree ruin and it asks if you want to put the rune stone in the the hole. The next day you come back and it's grown more and the cave mouth is open.

You shouldn't need to water the tree to get it to grow, all that's required is to make sure you've beaten the Green Ruins boss AND meet Iris at her tower on Whale Island. My tree refused to grow up until I saw that cut scene.

Go to whale island fin (where the sheep and buffamoo appear) and follow the stairs all the way down until you reach the tower. To get the required cut scene make sure the time is between 6pm and 7pm.

The next day the tree should be grown and a hole should appear in the tree trunk and you should be able to put a tree stone in it.

In your question it says you put it next to the tree... be sure to put it into the tree by first examining it, then put in the tree rune stone, rune stones can be made by candy with 10 runeys for eah type, hope it helps

You need to do Kanno's first 2 or 3 quests, each quest makes the tree grow a little bit until there is a hole in it that you should be able to see. After you see the hole you need to put the tree runey in the hole, the next day it should have grown giant and opened up the ruins.